*Gold rises 0.26% as real yields fall and inflation expectations rise on trade policy concerns.
*US consumer confidence hits 4-year low, boosting stagflation narrative and safe-haven demand.
*Fed officials signal a revival in goods inflation, adding to market doubts about near-term rate cuts.
Gold prices advance on Tuesday as the US Dollar (USD) remains on the defensive and amid falling US real yields, which typically correlate inversely with precious metal prices. An unexpected rise in inflation expectations, driven by U.S. trade policies, boosted demand for the yellow metal, which gains 0.26%, trading at $3.018.
The market mood is mixed, with US stock indices split between winners and losers. US data revealed that consumer confidence fell to its lowest level in more than four years, as households fear a future recession amid elevated inflation readings, according to the Conference Board (CB). This paints a picture of stagflation.
Therefore, the yellow metal rose slightly as recent data paints a stagflationary economic picture.
Elsewhere, some Federal Reserve (Fed) officials crossed the lines. Governor Adriana Kugler stated that goods inflation has picked up, noting that some subcategories have shown signs of revival. Finally, New York Fed President John Williams commented that both businesses and households face increased uncertainty about the economic outlook, reflecting growing concerns about future conditions.
The money market has incorporated 64.5 basis points of Fed easing in 2025, according to Prime Market Terminal's interest rate probabilities data.
What's moving the market today: Gold price supported by high inflation expectations.
*The U.S. 10-year bond yield falls three basis points (bps) to 4.308%. U.S. real yields fall three bps to 1.956% based on 10-year Treasury Inflation-Protected Securities (TIPS) yields.
*The U.S. Dollar Index (DXY), which tracks the dollar's performance against a basket of six currencies, falls 0.15% to 104.15.
*March CB consumer confidence fell from 100.1 to 92.9, below estimates of 94.
*According to the CB, written responses to the survey showed that "concerns about the impact of trade policies and tariffs in particular are on the rise."
*On Monday, Atlanta Fed President Raphael Bostic stated that he supports only one rate cut this year and does not expect inflation to return to target until around 2027.
XAU/USD Technical Outlook: Gold price advances beyond $3,010.
The uptrend in Gold remains in play, although buyers lack the conviction to achieve a daily close above the current week's high of $3,036, which could aggravate a test of the record price of $3,057. A break of the latter will open the way to test $3,100.
The Relative Strength Index (RSI) is bullish, with momentum backing buyers. Therefore, further gains in precious metal prices are expected.
On the other hand, if the XAU/USD falls below $3,000, this will expose the February 24 high at $2,956, followed by the $2,900 level and the 50-day simple moving average (SMA) at $2,874.
Christian Borjon Valencia, FXStreet